- The declining volume and price increase could cause consolidation for DOT.
- Searches for DOT have decreased, indicating a decrease in demand.
A significant drop in daily trading volume has prompted Polkadot [DOT] threatens a new decline. Volume is not necessarily an indicator of a price increase.
If trading volume increases, it means that a token is being traded a lot. Conversely, a decline in the metric suggests that interest in a cryptocurrency has declined.
The excitement in the token decreases
For Polkadot, data from Artemis.xyz showed volume was $137.80 million. This was one of the lowest the project has seen since the start of the second quarter of the year.
However, the price of DOT has increased by 6.61% over the past seven days. But a massive drop in volume could be a stumbling block to that increase.
Source: Artemis
Previously, there were predictions that DOT could go back to $10. If volume increases as price rises, this prediction could become reality.
But that wasn’t the case, as rising prices and declining volume indicate weakness in the trend. As such, DOT could fluctuate between $7.15 and $7.60 in the near term.
Additionally, AMBCrypto looked at Polkadot’s development activities, as this was an aspect that dominated the project. According to Santiment, development activity on the network was 2.92.
Two days ago the reading was 2.20, indicating that more codes have been captured to ensure Polkadot functions properly
Taurus are not the kings this time
For some projects, an increase in development activity is a bullish sign for the price. But for DOT this is not always the case. Sometimes the price of DOT increases with the metric. Other times the price doesn’t follow.
Therefore, it cannot be said that this network improvement is a propeller that drives the value of the token upward. Apart from this, AMBCrypto checked the social volume.
When social volume increases, it implies that the search for a project increases. On the other hand, if social volume decreases, it suggests that random text linked to DOT is decreasing.
Source: Santiment
At the time of writing, Polkadot’s social volume increased on May 17. On the 18th the metric dropped. For the price, this means that the demand for DOT was low.
Therefore, a price increase of more than 25% may be unfeasible in the short term. Meanwhile, the metrics discussed here are not the only ones that have the potential to influence the price of DOT.
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To get a full understanding: other indicators in the chain, such as network growth, can also influence value.
If network growth increases, demand for DOT can increase the price. However, that hasn’t been the case, indicating that DOT’s potential to reach double digits this month may not be an option.